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Public onfidence at risk if lenders fail to pass on mortgage rate cut


Virgin Direct decision to drop its mortgage rate follows research showing public confidence could become a casualty if cuts were not passed on.


Virgin&#39s 0.25 per cent rate cut follows last weeks reduction in the Bank of England&#39s base rate.


The research by Mori conducted after the previous BoE rate cut which was only partially passed on to borrowers, found mortgage customers would lose confidence in institutions failed to pass on the benefits of the next cut.


Mori says 56 per cent of those surveyed said that he trust they have in their lender would be damaged if it failed to change its variable rate in-line with base rates.


More significantly 74 per cent of those interviewed said they would rather see their mortgage rate go down than their savings rate go up.


The research was conducted in early May 1999 among 354 UK mortgage holders. Over 80 per cent of those surveyed also had savings.

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